Gallup's August Economic Audit

Ratings remain negative and increasingly pessimistic

GALLUP NEWS SERVICE

PRINCETON, NJ -- The Federal Reserve is widely expected to lower
interest rates on Tuesday -- for the 7th time this year.
The results of the Gallup Poll's August audit on consumer attitudes
towards the economy and business suggest that such an attempt to
continue to stimulate the economy is warranted.

American consumers' ratings of both the national economy and
their own financial situation show no signs of improvement. As
measured in this weekend's Gallup poll, the ratings of the national
economy remain negative. Any hint of the optimism found in previous
months' ratings of future economic conditions has been erased. Only
a little more than a third of Americans now rate the economy as
either excellent or good, and six out of 10 say it is getting worse
instead of better. Two-thirds of Americans say the economic news
they hear is negative. About one out of four Americans
spontaneously mention the economy, unemployment or a recession when
asked to name the number one problem facing the nation. None of
these measures, it should be noted, are as negative as they were in
the early 1990s, but most continue to represent low points for the
recent past.

More Americans say their own financial situations are worse
today than they were in 2000. Gallup first asked this question in
1976 and never has the response been so negative.

Here are the details:

1. Rate the Current Economy

Public Rating of Economy
October 2000 - August 2001

The August16-19 Gallup poll shows that 36% of Americans rate the
economy positively (either "excellent" or "good"). This represents
a decline from July, when 41% rated the economy positively.
Positive ratings have leveled off in the low- to mid-40s since the
spring, after steeper declines from late 2000 and early 2001. As
recently as January, 67% of Americans rated the economy positively,
and in February a majority still thought economic conditions were
either excellent or good. Still, the 36% positive number is much
higher than was measured early in the 1990s, when at one point just
10% have gave the economy a positive rating.

At the same time, Americans remain reluctant to rate the current
economy as "poor." Only 14% give such a rating. A near majority of
Americans, 49%, rate the economy as "only fair" in the poll. In
1992, 40% of Americans routinely rated the economy as poor.

2. Looking Ahead, Is the Economy Getting Better or
Worse?

Future Expectations of Economy
October 2000 - August 2001

The public's responses to the optimism/pessimism question had
shown a glint of optimism -- the percentage thinking things would
get better had steadily increased from 24% in April to 35% in July.
However, that positive view of the future economy seems to have
subsided. Just 27% of the public now believes things are getting
better. A majority of Americans continue to believe that things are
getting worse, as has been the case since January of this year.
Last fall, however, the optimists outnumbered the pessimists by a
significant margin.

Looking further back, the "getting worse" number peaked at 71%
back in January 1992. The "getting better" number was at its
highest point of 69% in January of 2000.

3. The #1 Problem Facing the Country Today

Each month, Gallup asks the public to name the most important
problem currently facing the country. The question is asked in an
open-ended fashion, allowing us to measure Americans' spontaneous,
top-of-mind concerns without prompting or suggestions. Over the
past few months, there has been an increase in the percentage of
Americans who mention the economy, although this percentage remains
significantly lower than in previous years. Currently, 15% of
Americans name the economy in general terms as the nation's number
one problem, 9% cite unemployment, 1% say inflation, 1% mention
recession, and 3% mention some other economic problem, for a
combined total of 29% mentioning economic problems. This number is
slightly higher than it was last month, when 24% mentioned one of
these as the most important problem, but is roughly on par with
what we found in April.

Back in March 1991, by way of comparison, 42% named the economy
as the number one problem, 25% said unemployment and jobs, and 3%
mentioned the recession, for a total of 70%, almost three times
what we find today.

What do you think is the most important problem facing this
country today?[Open-ended]

Aug
16-19,
2001

Jul
19-22,
2001

Jun
11-17, 2001

May
10-14,
2001

Apr
6-8,
2001

Mar
5-7,
2001

Jan
10-14,
2001

Economy in general

15

14

10

10

15

10

7

Unemployment/jobs

9

6

4

6

6

4

4

Other specific economic

3

*

--

2

--

1

*

Recession

1

--

--

*

--

3

4

Inflation

1

4

3

1

7

2

1

TOTAL

29

24

17

19

28

20

16

Education

9

10

12

9

10

16

12

Ethics/moral/religious/family decline; dishonesty; lack of
integrity

9

9

9

8

9

11

13

4. Personal Financial Situation Compared to One Year
Ago

Personal Financial Situation
Compared to One Year Ago
October 2000 - August 2001

In the latest poll, 41% say their own personal financial
situation is worse now compared to one year ago, while 37% say it
is better. This 41% figure is the highest Gallup has ever recorded
on this measure, stretching back to 1976. The number is also nearly
double what it was last October, when just 21% said their personal
financial situation was worse compared to a year ago. The fact that
the economy has changed so dramatically from last year, a time of
highly visible and sustained economic growth to a time of very
minimal growth, may help explain why negative assessments on this
"compared to a year ago" measure are at an all-time high. Other
years, such as 1991, 1982 and the late 1970s, were actually marked
by worse economic conditions than currently exist, but these times
were not preceded by the kind of economic growth witnessed from the
mid-to-late 1990s to 2000.

The 37% figure representing those who say their financial
situation is better is not among the lowest recorded, but it is the
lowest since March of 1994 (34%). The measure has been as low as
25% in August of 1982.

5. Looking Ahead, What Will Your Personal Financial Situation
Be in One Year?

Personal Financial Situation
This Time Next Year
October 2000 - August 2001

Despite the generally pessimistic comparisons of this year's
financial situation and negative views about the future of the
national economy, Americans remain optimistic that their own
financial situation will improve in the next 12 months. Currently,
66% believe that their personal financial situation will be better
this time next year. The number has remained in the 60% range
throughout this year. In fact, it is apparent that Americans are
essentially eternal optimists -- it is rare for Americans to
believe things will not get better for them in the future. This
measure has only fallen below 50% a few times -- 1993, 1990-1991,
and 1977-1983.

6. Economic News You Have Recently Heard

It is not surprising Americans rate the economy poorly -- given
that 66% say the economic news they have been hearing recently has
been mostly bad. Only 22% say it has been mostly good. At the same
time, these numbers are actually more positive than they were in
April of this year, when 75% said they had heard mostly bad
economic news lately and only 16% had heard mostly good news.
However, in 2000, the story was quite different. At that time, 71%
said they had heard mostly good economic news and just 19% had
heard mostly bad.

Survey Methods

These results are based on telephone interviews with a randomly
selected national sample of 1,013 adults, 18 years and older,
conducted August 16-19, 2001. For results based on this sample, one
can say with 95 percent confidence that the maximum error
attributable to sampling and other random effects is plus or minus
3 percentage points. In addition to sampling error, question
wording and practical difficulties in conducting surveys can
introduce error or bias into the findings of public opinion
polls.

Now turning to the economy,

How would you rate economic conditions in this country today --
as excellent, good, only fair, or poor?

Ex-
cel-
lent

Good

Only
fair

Poor

No
opin-ion

Ex-
cel-
lent

Good

Only
fair

Poor

No
opin-ion

%

%

%

%

%

%

%

%

%

%

2001

1997

2001 Aug 16-19

2

34

49

14

1

1997 Jan 31-Feb 2

4

38

43

15

*

1996

2001 Jul 19-22

3

38

47

11

1

1996 Oct 26-29

5

42

39

13

1

2001 Jun 11-17

3

39

45

12

1

1996 Aug 30-Sep 1 †

3

34

46

16

1

2001 May 10-14

3

37

45

15

*

1996 Jul 18-21

5

38

43

14

*

2001 Apr 6-8

4

41

41

14

*

1996 May 9-12

3

27

50

19

1

2001 Mar 5-7

3

43

43

10

1

1996 Apr 9-10

1

26

52

20

1

2001 Feb 1-4

7

44

36

13

*

1996 Mar 15-17

2

31

48

18

1

2001 Jan 10-14

11

56

27

6

*

1996 Jan 5-7

1

28

47

23

1

2000

1995

2000 Dec 2-4

12

51

28

8

1

1995 Nov 6-8

2

28

47

22

1

2000 Nov 13-15

19

53

21

7

*

1995 May 11-14

2

27

50

20

1

2000 Oct 6-9

14

57

24

4

1

1994

2000 Aug 18-19

25

49

21

4

1

1994 Dec 16-18

2

25

52

21

*

2000 Jul 25-26

26

48

21

4

1

1994 Nov 2-6

2

28

49

20

1

2000 May 18-21

17

49

24

9

1

1994 Oct 22-25

1

25

52

21

1

2000 Apr 3-9

14

46

30

9

1

1994 Jul 15-17

1

26

52

21

*

2000 Jan 7-10

19

52

23

5

1

1994 Apr 22-24

1

23

49

26

1

1999

1994 Jan 15-17

*

22

54

24

*

1999 Oct 21-24

16

49

27

8

*

1993

1999 Sep 10-14

20

47

24

8

1

1993 Dec 4-6

1

20

57

21

1

1999 Aug 24-26

14

50

28

7

1

1993 Nov 2-4

1

16

50

33

*

1999 Jun 4-5

18

56

21

5

*

1993 Aug 8-10

*

10

49

40

1

1999 Jan 15-17

14

55

27

4

*

1993 Jun 29-30

1

14

52

32

1

1998

1993 Feb 12-14

*

14

46

39

1

1998 Dec 4-6

13

52

27

8

*

1992

1998 Oct 29-Nov 1

13

53

27

6

1

1992 Dec 18-20

2

16

34

47

1

1998 Sep 1

11

54

25

9

1

1992 Dec 4-6

1

14

41

43

1

1998 Mar 20-22

20

46

27

7

*

1992 Oct 23-25

*

11

45

43

1

1997

1992 Sep 11-15

1

10

37

51

1

1997 Dec 18-21

7

41

38

12

2

1992 Aug 31-Sep 2 †

1

9

37

53

*

1997 Nov 6-9

10

48

33

9

*

1992 Jun 12-14 †

1

11

47

41

*

1997 Aug 22-25^

8

41

38

13

*

1992 Apr 9-12 †

1

11

40

48

*

1997 May 6-7

7

39

38

15

1

1992 Jan 3-6

*

12

46

41

1

^ Asked of half sample

† Asked of Registered Voters

Right now, do you think that economic conditions in the
country as a whole are getting better or getting worse?

Get-
ting
better

Get-
ting
worse

SAME
(vol.)

No opin-
ion

Get-
ting
better

Get-
ting
worse

SAME
(vol.)

No
opin-
ion

%

%

%

%

%

%

%

%

2001

1998

(NA) 2001 Aug 16-19

27

59

11

3

(NA) 1998 Dec 4-6

52

38

8

2

(NA) 1998 Oct 29-Nov 1

51

38

8

3

(NA) 2001 Jul 19-22

35

53

9

3

(NA) 1998 Sep 1

45

41

11

3

(NA) 2001 Jun 11-17

29

60

8

3

(NA) 1997 Dec 18-21

49

39

8

4

(NA) 2001 May 10-14

25

63

9

3

(NA) 1997 Nov 6-9

51

37

9

3

(NA) 2001 Apr 6-8

24

63

9

4

(NA) 1997 May 6-7

50

40

7

3

(NA) 2001 Mar 5-7

28

61

7

4

(NA) 1997 Jan 31-Feb 2

46

39

12

3

(NA) 2001 Feb 1-4

23

66

8

3

1996

(NA) 2001 Jan 10-14

32

56

8

4

(NA) 1996 Oct 26-29

50

38

7

5

2000

(RV) 1996 Aug 30-Sep 1

52

37

8

3

(NA) 2000 Dec 2-4

39

48

8

5

(NA) 1996 Jul 18-21

43

46

9

2

(NA) 2000 Nov 13-15

50

38

9

3

(NA) 1996 May 9-12

39

49

9

3

(NA) 2000 Oct 6-9

54

34

10

2

1992

(NA) 2000 Aug 18-19

60

26

10

4

(RV) 1992 Aug 31-Sep 2

29

59

10

2

(NA) 2000 Jul 25-26

58

29

9

4

(RV) 1992 Aug 10-12

24

65

10

1

(NA) 2000 May 18-21

52

37

9

2

(RV) 1992 Jun 12-14

28

61

9

2

(NA) 2000 Jan 7-10

69

23

6

2

(RV) 1992 Apr 9-12

40

45

13

2

1999

(RV) 1992 Mar 20-22

37

51

11

1

(NA) 1999 Oct 21-24

52

34

11

3

(RV) 1992 Jan 31-Feb 1

22

70

7

1

(NA) 1999 Sep 10-14

59

29

9

3

(NA) 1992 Jan 3-6

22

71

6

1

(NA) 1999 Aug 24-26

54

31

12

3

1991

(NA) 1999 Jun 4-5

60

27

9

4

(NA) 1991 Dec 5-8

19

69

9

3

(NA) 1999 Jan 15-17

63

28

6

3

(NA) 1991 Sep 5-8

27

60

10

3

(NA) 1991 Jul 11-14

34

51

9

6

ECONOMIC OUTLOOK GROUPS (Q. 5/6 COMBINED)

Posi-
tive

Mixed

Nega-
tive

Un-
desig-nated

Posi-
tive

Mixed

Nega-
tive

Un-
desig-
nated

%

%

%

%

%

%

%

%

2001

1999

2001 Aug 16-19

20

27

50

3

1999 Aug 24-26

48

28

21

3

1999 Jun 4-5

59

20

17

4

2001 Jul 19-22

25

29

42

4

1999 Jan 15-17

54

26

17

3

2001 Jun 11-17

22

28

45

5

1998

2001 May 10-14

20

28

49

3

1998 Dec 4-6

47

28

23

2

2001 Apr 6-8

21

30

44

5

1998 Oct 29-Nov 1

47

27

22

4

2001 Mar 5-7

22

33

41

4

1998 Sep 1

45

27

24

4

2001 Feb 1-4

22

33

42

3

1998 Mar 20-22

59

21

18

2

2001 Jan 10-14

30

40

26

4

1997

2000

1997 Dec 18-21

36

28

31

5

2000 Dec 2-4

36

35

25

4

1997 Nov 6-9

46

23

28

3

2000 Nov 13-15

47

32

18

3

1997 May 6-7

38

23

36

3

2000 Oct 6-9

51

28

18

3

1997 Jan 31-Feb 2

33

24

40

3

2000 Aug 18-19

60

21

15

4

1996

2000 Jul 25-26

57

23

16

4

1996 Oct 26-29

37

25

33

5

2000 May 18-21

48

28

21

3

1996 Aug 30-Sep 1

31

29

36

4

2000 Jan 7-10

61

21

15

3

1996 July 18-21

32

25

40

3

1999

1996 May 9-12

22

28

47

3

1999 Oct 21-24

50

24

23

3

1992

1999 Sep 10-14

55

22

19

4

1992 Aug 31-Sep 2

7

25

66

2

1992 Jun 12-14

8

25

65

2

What do you think is the most important problem facing this
country today? [Open-ended]

Get Articles in Related Topics:

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